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Why Employment Interviews Don't Work

NEW YORK ( TheStreet) -- The data are overwhelming -- job interviews are a terrible predictor of success. Yet virtually every person reading this article will insist, "That may be true for others, but it's not true for me." You're wrong. You don't know how to interview job candidates either.

Myth 1: We Know Whether We Are Good at Interviewing

I wrote my master's thesis on interviewing. One study stands out in my mind from when I was conducting the preparatory research. It found that a person's belief that he can accurately assess another person is not at all correlated to his actual ability to do so. It seems that we don't let our competence affect our confidence.

Myth 2: Smart People Are Great at Interviewing

Medical school professors are some of the smartest people in society. Yet a study found no correlation between medical school interview scores and success in medical school. The relationship was actually negative, but nonsignificant. One wonders what the professors' reaction was to these data; they are scientists after all. Did they blame themselves?

Myth 3: A Structured Approach Will Improve Selection Accuracy

On my first job at a consulting firm, I was assigned to coordinate the new consultant hiring process. We decided to organize a Saturday session where 10 candidates were each assessed in five competency areas (e.g., quantitative, analytical) by five interviewers, round-robin style.

At the end of the day, we held an interviewer's roundtable to select candidates. As we reviewed the first candidate, the "quantitative skills" interviewer said, "She has no quantitative skills at all!" Another said, "She has a master's degree in math from MIT!" The interviewer replied, "She does? Well ... she has no quantitative skills at all!" And so it went.

Myth 4: Experience Creates Great Interviewers

Being an interview skeptic, I recently advised two sales executives to conduct an outsourced assessment for a new sales director candidate. Both were highly offended. Each said that he had interviewed hundreds of candidates in his career and could accurately differentiate good and poor candidates.

We went ahead as usual. I screened several candidates and recommended a man named Harris. The first executive interviewed Harris and said that he would definitely succeed in the role. The second said Harris would definitely fail. I met with the executives together and said, "There is a truth here. Harris will either fail or not fail. That means one of you is wrong." Both insisted it was not him.

In 2002, Daniel Kahneman, a psychologist, won a Nobel Prize in economics for his work on judgments and decision-making.

As a young soldier, Kahneman participated in a high potential assessment exercise where a team of assessors observed and rated a group of soldiers in a physical exercise to determine leadership potential. The assessment process was rigorous.

Every few months the assessment team received a new round of performance ratings that made it possible to correlate simulation ratings with actual performance. Kahneman writes, "The story was always the same. Our ability to predict performance was negligible. Our forecasts were better than blind guesses, but not by much."

Their evidence made it clear that their leadership assessment did not work. It should have been scrapped, but it was not. It should have reduced the confidence of the assessors to make accurate decisions, but it did not. They just kept using it.

It is possible to greatly improve the success of new hires by focusing on three areas:

1. technical/professional skill assessment;

2. leadership behavior; and

3. on-boarding.

Technical/professional skills

Technical interviewing skills can be learned, and interviews should be conducted by an in-house panel interview. Panels provide a quality check on the assessment. Use a structured interview where questions are determined up front. For example, "Tell me how you would design a wireless network with the following parameters ..."

Make the technical interview your first step. If the candidate does not have the basic skills for the job, eliminate him or her immediately.

Leadership behavior

Behavior is more difficult to accurately assess than technical skills. But leadership behaviors can be effectively assessed by an expert through a 3- to 4-hour interview.

Some might say that cultural fit must be assessed by an internal manager. But if internal managers can do that so well, then why do several managers come up with different fit assessments? It's because culture is not operationalized. An external firm will help you operationalize your culture and then assess for fit.

Kohlberg Kravis Roberts(KKR) is the private equity industry pioneer, and its executives are some of the smartest people on Wall Street. Certainly they should know how to assess managers. But KKR knows its limitations and uses ghSmart to assess its new executives. The ghSmart process is a four-hour behavioral interview plus rigorous reference checks. The company provides a 50-page summary report with verbatim quotes.

It is critical to note that the external firm provides relevant data for the manager to make an informed decision. Hiring decisions must never be outsourced. This is similar to strategy consulting. Information collection may be outsourced, but the choice of a strategy is not.

On-boarding

Too often the right person was selected, but fails because of an inability to be integrated into the system of the organization. The "system" is how things get done.

A key part of on-boarding is pre-hire stakeholder interviews. On-boarding begins before the hiring decision. To prepare each stakeholder, present the technical and leadership behavior data before their interview. It is possible that the interviewer may find new data to reject the candidate, but the purpose of these interviews is buy-in more than assessment.

Typical employment interviews are not effective predictors of future job performance. Let's lower our pride and admit that we are the problem. We can do better.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Hall is managing director of Human Capital Systems (www.humancapitalsystems.com), a firm that designs systems for improving workforce performance. He is also an instructor in Duke Corporate Education's teaching network and author of The New Human Capital Strategy. Hall was formerly a senior vice president at ABN AMRO Bank in Amsterdam and IBM Asia-Pacific's executive in charge of executive leadership and organization effectiveness. During his tenure, IBM was twice ranked No. 1 in the world in Hewitt/Chief Executive magazine's "Top Company for Leaders." Hall completed his Ph.D in industrial-organizational psychology at Tulane University, with a dissertation on people management practices of Japanese corporations.